Posted on 10/23/2012 5:05:35 AM PDT by thackney
No argument with that, but it is also true that it is inevitable that production costs will drop.
"Wages in the patch have finally risen to reasonable levels compared with, say, union auto workers, and be thankful there is no dead weight in the patch, no one sitting in the 'break room', just guys who work 12 hour days in virtually any weather, two weeks on, two weeks off.
My best bud from high school has done that his whole life (and is still doing it). Offshore. Fortunately, Louisiana is a "right-to-work" state, so no problems with unions there.
"Others of us do our jobs 'for the duration', and only get time off during rig moves and casing runs, and we're not going to work cheap after living off our savings during price crashes over the last few decades more than once. It goes out a lot faster than it stacks up. For many of the old hands out there, this is the shot at retirement. There are fewer than 20,000 people in the world who do what I do, and likely fewer than half that.
My sis-in-law fits into your category. She's geophysicist specializing in interpreting 3D seismic. Fortunately, during the last "bust", she was good enough to be able to transition to another company when her first one went down the tubes. Scary intelligent woman....but somewhat nuts. But her company is majorly focussing on NATGAS off Israel right now.
"As far as building rigs, some are, but stop and consider that the drilling contractors aren't in a hurry to invest millions in rigs and the equipment to run them and the hands to man them to have them sit idle. They, too keep a sharp eye on demand, and will not oversupply the market or they could end up with a yard full of iron bought at top dollar and selling for scrap.
All true, but eventually the supply of rigs WILL increase, and I think faster than you might think. Read the PDF files linked by SC_Pete.....the numbers are truly mind-boggling.
"Some oil will be displaced by natural gas, which is already a prime heating fuel in this region (Northern Plains), and a lot will go to power generation."
"With the ever moving target of EPA regs, coal has been hurt, but while it is down, I do not think it is out just yet. It is still a viable fuel, available in mind-boggling supply, and cheap. The destruction of the coal industry has been a government construct from day one, using regulations to pick 'winners' by eliminating the competition, one of the standard operating tactics of this administration. As the power plants got cleaner, they moved the bar.
While this is all true, I don't see a future for coal in the short run. The magic word is "pipeline". Coal has to be moved by train, and simply cannot compete. Add into that equation the very near proximity to the northwest USA shale plays (much shorter pipelines) to existing coal-fired plants. Eventually some bright guy is going to figure an easy way to convert an existing coal-fired plant to gas-fired, or even combined cycle. When that happens, coal is "done" for the near future. Of course, eventually even the shale gas will run out, and coal "might" come into it's own again.
"It amazes me that any UAW member would vote Democrat this time around. "
I suspect you may mean UMW instead of UAW, though the UAW members will also be affected.
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